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Eni (E) Beats on Q4 Earnings, Plans Full Decarbonization
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Eni SpA (E - Free Report) reported fourth-quarter 2020 adjusted earnings from continuing operations of 5 cents per American Depository Receipt (ADR), beating the Zacks Consensus Estimate by a penny. The bottom line, however, declined from the year-ago earnings of 33 cents per ADR.
Total revenues for the quarter totaled $14,237 million, down from $18,226 million a year ago.
The better-than-expected earnings were owing to higher petrochemical product sales, partially offset by lower realization of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes.
The company operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Refining & Marketing and Chemicals and EGL, and Power & Renewables.
Exploration & Production
Total oil and gas production for the fourth quarter was 1,713 thousand barrels of oil equivalent per day, down 11% year over year.
Liquids production was 809 thousand barrels per day (MBbl/d), down 13% from the year-ago level of 926 MBbl/d. Moreover, natural gas production dropped 11% year over year to 4,800 million cubic feet per day.
Average realized price of liquids was $41.57 per barrel, down 30% from $59.06 reported a year ago. Moreover, realized natural gas price was $3.92 per thousand cubic feet, down 18% from $4.79 a year ago.
Lower realizations of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes hurt the company’s Exploration & Production segment. The segment reported a profit of €802 million, down from €2,051 million recorded in the December quarter of 2019.
Global Gas & LNG Portfolio
Eni’s worldwide sales of natural gas for the December quarter were recorded at 18.57 billion cubic meters (bcm), up 9% year over year.
The integrated energy major’s Global Gas & LNG Portfolio business segment reported adjusted operating loss of €101 million, wider than the year-ago loss of €46 million. The underperformance was owing to an unfavorable trading environment.
Refining & Marketing and Chemicals
For the December quarter, total refinery throughputs were recorded at 6.41 million tonnes (mmtonnes), down 16% year over year. Also, Eni’s wholesale sales in Europe fell 20% year over year to 2.11 mmtonnes. However, petrochemical product sales improved 27% year over year to 1.33 mmtonnes for the fourth quarter of 2020.
For the quarter under review, the segment reported an adjusted loss of €104 million, narrower than the year-ago loss of €161 million, primarily owing to improved petrochemical product sales.
EGL, Power & Renewables
Retail gas sales — managed by Eni gas e luce (EGL) — increased 1% year over year to 2.51 bcm, thanks to a recovery in retail consumption. Moreover, retail power sales improved 11% year over year, thanks to a growing base of retail customers. Notably, EGL is an energy retail company that is controlled entirely by Eni.
Power sales in the open market, under the Power & Renewables business, declined 4% year over year owing to a downturn in economic activities.
Overall, from EGL, Power and Renewables, the company reported a profit of €132 million, reflecting a 15% year-over-year decline.
Financials
As of Dec 31, Eni had a long-term debt of €21,895 million, and cash and cash equivalents of €9,413 million. Its debt to capitalization was 41.6%.
For the reported quarter, net cash generated by operating activities amounted to €988 million. Capital expenditure totaled €1,187 million.
Outlook
From 2021 through 2024, the company expects production to witness a compound annual growth rate of 4%. The integrated energy player is on track with the plan of full decarbonization of products and processes by 2050.
Zacks Rank & Other Key Picks
Eni currently sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback and Antero Resources carry a Zacks Rank #2 (Buy), Matador sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
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Eni (E) Beats on Q4 Earnings, Plans Full Decarbonization
Eni SpA (E - Free Report) reported fourth-quarter 2020 adjusted earnings from continuing operations of 5 cents per American Depository Receipt (ADR), beating the Zacks Consensus Estimate by a penny. The bottom line, however, declined from the year-ago earnings of 33 cents per ADR.
Total revenues for the quarter totaled $14,237 million, down from $18,226 million a year ago.
The better-than-expected earnings were owing to higher petrochemical product sales, partially offset by lower realization of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes.
Eni SpA Price, Consensus and EPS Surprise
Eni SpA price-consensus-eps-surprise-chart | Eni SpA Quote
Operational Performance
The company operates through four business segments — Exploration & Production, Global Gas & LNG Portfolio, Refining & Marketing and Chemicals and EGL, and Power & Renewables.
Exploration & Production
Total oil and gas production for the fourth quarter was 1,713 thousand barrels of oil equivalent per day, down 11% year over year.
Liquids production was 809 thousand barrels per day (MBbl/d), down 13% from the year-ago level of 926 MBbl/d. Moreover, natural gas production dropped 11% year over year to 4,800 million cubic feet per day.
Average realized price of liquids was $41.57 per barrel, down 30% from $59.06 reported a year ago. Moreover, realized natural gas price was $3.92 per thousand cubic feet, down 18% from $4.79 a year ago.
Lower realizations of average liquids and natural gas prices, along with a decline in hydrocarbon production volumes hurt the company’s Exploration & Production segment. The segment reported a profit of €802 million, down from €2,051 million recorded in the December quarter of 2019.
Global Gas & LNG Portfolio
Eni’s worldwide sales of natural gas for the December quarter were recorded at 18.57 billion cubic meters (bcm), up 9% year over year.
The integrated energy major’s Global Gas & LNG Portfolio business segment reported adjusted operating loss of €101 million, wider than the year-ago loss of €46 million. The underperformance was owing to an unfavorable trading environment.
Refining & Marketing and Chemicals
For the December quarter, total refinery throughputs were recorded at 6.41 million tonnes (mmtonnes), down 16% year over year. Also, Eni’s wholesale sales in Europe fell 20% year over year to 2.11 mmtonnes. However, petrochemical product sales improved 27% year over year to 1.33 mmtonnes for the fourth quarter of 2020.
For the quarter under review, the segment reported an adjusted loss of €104 million, narrower than the year-ago loss of €161 million, primarily owing to improved petrochemical product sales.
EGL, Power & Renewables
Retail gas sales — managed by Eni gas e luce (EGL) — increased 1% year over year to 2.51 bcm, thanks to a recovery in retail consumption. Moreover, retail power sales improved 11% year over year, thanks to a growing base of retail customers. Notably, EGL is an energy retail company that is controlled entirely by Eni.
Power sales in the open market, under the Power & Renewables business, declined 4% year over year owing to a downturn in economic activities.
Overall, from EGL, Power and Renewables, the company reported a profit of €132 million, reflecting a 15% year-over-year decline.
Financials
As of Dec 31, Eni had a long-term debt of €21,895 million, and cash and cash equivalents of €9,413 million. Its debt to capitalization was 41.6%.
For the reported quarter, net cash generated by operating activities amounted to €988 million. Capital expenditure totaled €1,187 million.
Outlook
From 2021 through 2024, the company expects production to witness a compound annual growth rate of 4%. The integrated energy player is on track with the plan of full decarbonization of products and processes by 2050.
Zacks Rank & Other Key Picks
Eni currently sports a Zacks Rank #1 (Strong Buy). Other prospective players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback and Antero Resources carry a Zacks Rank #2 (Buy), Matador sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>